Mumbai, Jan. 18: Reliance Industries Ltd — the country’s largest private company — today stunned the Street with a better-than-expected 24 per cent jump in net profits at Rs 5,502 crore in the third quarter ended December 31.
The consensus estimate among analysts was Rs 5,100 crore. In the same quarter last year, the oil refining and petrochemicals giant had reported a net profit of Rs 4,440 crore.
The strong showing by the Mukesh Ambani’s flagship company was buttressed by its refining and petrochemicals businesses.
In refining, gross refining margins (GRMs) — a key performance metric — stood at $9.60 per barrel against the Street’s expectation of around $8.50 per barrel.
Analysts said that the superior GRMs was because of efficient sourcing of crude oil and selling the refining products at better rates.
The GRM is the difference between the cost of processing crude oil and revenues obtained from the sale of finished products.
RIL said in a statement that its Jamnagar refinery had processed 52.4 million tonnes of crude and achieved a utilisation rate of 113 per cent, much higher than the average utilisation rates for refineries globally.
All these factors helped RIL to post a 13 per cent rise in revenues at Rs 86,641 crore (Rs 76,738 crore). Margins were also stable at 4.2 per cent.
Revenues at the petrochemicals business surged 11.5 per cent to Rs 22,053 crore from Rs 19,781 crore in the third quarter of last year.
RIL said that this was on account of higher prices that showed a jump of nearly 11 per cent, while volumes were almost flat with a growth of 0.6 per cent.
“Reliance’s performance has improved in this quarter with margin expansion in petrochemicals and record earnings in the refining business. We are investing over Rs 100,000 crore by expanding our petrochemical capacities and adding value to our refining business. These investments will secure a significant change in Reliance’s earning capacity on commissioning of these projects,” RIL chairman and managing director Mukesh Ambani said.
While the turnover at the company rose a little over 10 per cent to Rs 96,307 crore (Rs 87,480 crore) for the quarter, RIL said its cash and cash equivalents swelled to Rs 80,962 crore ($14.7 billion).
The quarterly numbers came after market hours that saw its shares gaining 1.05 per cent. Market observers said the stock will rally when trading resumes on Monday.
“RIL’s topline as well as bottomline were above our estimates on account of higher than expected profitability from the refining segment. But in view of the recent rise in the stock price, we maintain our neutral rating for the stock,” said Bhavesh Chauhan, senior research analyst at Angel Broking.
However, the exploration & production business saw revenues falling 32 per cent to Rs 1,921 crore from Rs 2,832 crore in the corresponding period last year because of falling output from the KG-D6 gas field.
Of its new business, turnover from retail grew 44 per cent to Rs 7,749 crore as the company continued to expand stores across the country.
It has over 1,400 stores in 129 cities.
Infotel Broadband Services (Infotel), a Reliance subsidiary that had won broadband spectrum in 22 circles or zones, is setting up a network to offer the 4G service.
Sensex above 20000
The BSE benchmark Sensex today ended above the 20000-mark for the first time in two years on continued strong buying in oil and gas stocks by foreign institutional investors on the back of the partial deregulation in diesel prices.
Strong global cues also helped to maintian the uptrend.
The 30-share Sensex rose 75.01 points, or 0.38 per cent, to close at 20039.04, a level last seen on January 6, 2011.
The broad-based National Stock Exchange index Nifty rose 25.20 points, or 0.42 per cent, to 6064.40.